Executive Order 13496: Practical Guidance for Government Contractors and Subcontractors Regarding Notifying Employees of Rights Under the National Labor Relations Act

Pursuant to a recently issued final rule for Executive Order 13496 ("EO 13496") covered federal contractors and subcontractors must provide employees with a notice of their rights under the National Labor Relations Act ("NLRA"), and include a clause related to this employee notice in covered federal contracts, subcontracts and purchase orders. There are several practical considerations for government contractors and subcontractors to consider in order to comply with the regulations for EO 13496.Beck Notice No Longer Applies

EO 13496 effectively revokes Executive Order 13201, commonly referred to as the "Beck Notice" or "Beck Poster." The Beck Notice required federal contractors and subcontractors to post a notice informing employees of their right not to join a labor union, inter alia.

Threshold for Compliance Differs for Contractors v. Subcontractors

EO 13496 does not apply to prime contracts under the Simplified Acquisition Threshold (currently set at $100,000), or to subcontracts below $10,000. This means that while the Order does not apply to prime contracts under $100,000, EO 13496 does apply to subcontracts below $100,000 (but above $10,000). Although several commenters to the proposed rule argued that two different price thresholds for contractors versus subcontractors was unnecessarily confusing, the Department of Labor ("DOL") explained that it did "not consider the result — excepting prime contracts below the simplified acquisition threshold and covering subcontracts below that threshold — to be incongruous" based on the language of EO 13496. Companies that hold both prime contracts and subcontracts should make a special effort to monitor their compliance efforts.

Physical Posting Requirement is Broad

The regulations for EO 13496 (41 C.F.R. 471.2) state that the employee notice must be placed in conspicuous places in and about the contractor's plants and offices so that the notice is prominent and readily seen by employees. Such conspicuous placement includes, but is not limited to, areas in which the contractor posts notices to employees about the employees' terms and conditions of employment. According to DOL, the key for covered contractors and subcontractors is the phrase "prominent and readily seen by employees."

In addition, the employee notice must be posted where employees covered by the NLRA engage in activities relating to the performance of the contract. DOL interprets "contract-related activity" broadly. For example, contract-related activity includes indirect or auxiliary work such as maintenance, repair, personnel, payroll, and HR work. Accordingly, DOL contemplates that certain contractors and subcontractors "may have to post the notice at more than one of its facilities and in multiple areas of work and activity within individual facilities." For example, in addition to posting the notice in areas where a company traditionally posts its employment-related notices, covered contractors and subcontractors may need to post the notice in other central locations like printing areas, coffee/water stations, etc.

Specific Electronic Posting Link

If a contractor or subcontractor typically posts employment-related notices electronically, then that contractor or subcontractor must also post the required EO 13496 notice electronically (this is in addition to a physical posting — electronic posting is not a substitute for physical posting).

Electronic posting requires contractors and subcontractors to post a specific link to DOL's website containing the notice where they customarily place other electronic notices to employees about the terms and conditions of employment. The text for the link must read, "Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers'' and it must link to this page: http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf. The link must be no less prominent than other employee notices.

OFCCP Enforcement

The Office of Labor-Management Standards and the Office of Federal Contract Compliance Programs ("OFCCP") share responsibility for enforcing EO 13496. OFCCP compliance officers will conduct compliance verification checks as a routine part of the onsite phase of compliance evaluations (including, where appropriate, focused reviews).